January 19, 1984
Mr. Steven L. Zinter
Hughes County State's Attorney
Post Office Box 8
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 84-04
Holding of tax sale certificates by county
Dear Mr. Zinter:
You have requested an opinion from this office in regard to the following fact situation:
FACTS:
I am hereby requesting an official opinion from your office concerning the application of certain portions of Chapters 10-23 and 10-25 to county treasurers' issuance of tax certificates, the periods of redemption thereon, and the issuance of tax deeds. All the questions revolve around the meaning of the word 'held' as is found in SDCL 10-25-1, and 'bid off' as found in SDCL Chapter 10-23.
As you will note, SDCL 10-25-1 provides in part that tax sale certificates 'held' by the county may ripen into tax deeds if not redeemed at any time after four years from the date of the certificate. The meaning of the word 'held' in the statute is extremely important to the application of the initial sale of the certificates, the manner in which the certificates are issued, and the redemption thereof when such certificates are held by the county. The meaning of the word 'held' is also extremely important in the view of the practices of most county treasurers.
In preparing to write this request, I have spoken with several county treasurers, and they have informed me that at the annual tax sale, if no private offer is received to purchase the tax certificates pursuant to SDCL 10-23-8 and if no private sale of the tax certificate is made pursuant to SDCL 10-23-12, then one of two situations occurs. Either the county treasurer fills in the tax certificate in the name of the county without submitting any formalized bid, or the tax certificate is not filled out at all. In either case, the county treasurers with whom I have spoken deem this action to be a 'holding' of the tax certificate in the county's name. As a result, if no redemption is made within the redemption period a tax deed is issued pursuant to SDCL 10-25-1 because the treasurers feel that they have 'held' the tax certificate for the requisite period. Since the treasurers feel that they have 'held' the certificate in the name of the county, they have not and do not re-publish a notice of sale of the same real property for subsequent years, even though SDCL 10-23-3 requires that a notification of publication that all real property on which the taxes of the preceding year or years remain unpaid will be sold. The treasurers do not issue new tax certificates for subsequent years in which the taxes are not paid when there are no purchasers at the sale. Thus, the public is not put on notice as to the fact the taxes are not being paid on real property for all years after the first year in which the publication was made and the tax certificate was issued or 'held' in the name of the county. If an individual desires to purchase an old tax certificate which has been 'issued' or 'held' in the foregoing manner, the county treasurers generally just fill in the front of the certificate, execute an assignment of that certificate, and collect the back taxes.
Pursuant to SDCL 10-23-24, all of the foregoing procedures would at first glance seem to be proper if these tax certificates were 'bid off' in the county's name after the public tax sale. Under the provision, if there are no other bidders, the county treasurer is authorized to 'bid off' the real property for the amount of taxes, penalty, interest and costs in the name of the county. If that procedure is followed, SDCL 10-23-25 requires that a tax certificate be issued to the county, SDCL 10-23-26 provides that readvertising and resale not be required, and SDCL 10-23-27 provides that the county may assign such certificates. Thus, an interpretation of what constitutes 'bidding off' under Chapter 10-23 is also crucial.
It is at this point where the definition of 'held' and the definition of 'bid off' interrelate and this opinion is necessary. The confusion in essence is caused by the case of Brink vs. Dann, 144 N.W. 734 (1913). In that case, at page 738, the Supreme Court very clearly stated that in order for the property to be 'bid off' to the county, an open bid is essential. The Court specifically disapproved of the procedure presently being followed by many treasurers whereby they simply fill out the certificate in the name of the county or just hold a blank certificate where there are no bidders without submitting a formal written bid for the certificate.
Concerning this you have asked the following questions:
QUESTIONS:
1. If the county continues to follow these procedures and does not submit a formal written bid, but merely fills in the certificate in the name of the county in those cases where there are no bidders or purchasers at public or private sale, has the certificate been 'held' by the county within the meaning of SDCL 10-25-1 so that the county could obtain a tax deed to the premises after the statutory redemption period has expired?
2. Would your opinion with regard to Question No. 1 change if the county merely held the certificate in blank and did not even fill in the county's name until the redemption period has expired?
3. In either case, what date should be placed on the tax certificate since the redemption period runs from the 'date of the certificate' when it is 'held' by the county? (See SDCL 10-25-1).
4. Assuming the procedure outlined in Question No. 1 above is utilized and no formal written bid is made and a tax certificate is issued in the name of the county, should the county treasurer continue to public notice of the sale of such real property on which the taxes remain unpaid each succeeding year until the taxes have been paid and a deed issued or until the property is redeemed? (See SDCL 10-23-2 and 3.)
5. Would your opinion with regard to Question No. 4 change if the county merely held the certificate in blank and did not even fill in the county's name until the redemption period expired?
6. Assuming that the county treasurers follow the procedures set forth in Question No. 1 above, may they assign the certificate to a private party pursuant to SDCL 10-23-28?
7. Would your opinion with regard to Question No. 6 change if the county merely held the certificate in blank and did not even fill in the county's name until the redemption period expired?
8. If the procedures as outlined above were followed and no further publication was made for delinquent taxes in the succeeding years, could the original tax certificate be sold or assigned and a valid tax deed be subsequently issued to the purchaser or assignee of a tax certificate even though no publication was made in those subsequent years?
9. Finally, if the county cannot employ the informal bidding off procedures outlined above in order to 'hold' a certificate for purposes of obtaining a tax deed under SDCL 10-25-1, for not re-advertising and re- selling the property each year under SDCL 10-23-26, and for assignment under SDCL 10-23-28, what procedures must the county use to 'bid off' the property so that they may 'hold' the certificate, assign the certificate and not re-advertise and re-sell the same property each year when taxes continue to remain delinquent year after year?
As you have suggested, the case of Brink vs. Dann, 144 N.W. 734 (1913), seems to explain certain of the requirements of SDCL 10-23, if they are not sufficiently clear in and of themselves. In that case the evidence showed that for the land in question there were no bidders other than the county and it also showed that neither the treasurer nor any other person made any public bid on behalf of the county. The treasurer merely issued a certificate to the county on behalf of the county. As the Court said at 738, 'An examination of the statute reveals the fact that the rights of a purchaser at private sale are very different from those acquired by one who takes an assignment of a certificate held by the county.'
The law of the case has not changed and the logic is still valid that persons at a public sale are entitled to know who is bidding on the property, whether anyone has bid on the property, and the owner is entitled to know whether his property has been bid in at the time of sale.
Concerning this case and the individual statutes in question, I will attempt to answer your specific questions.
IN RE QUESTION NO. 1:
SDCL 10-23-24 authorizes the county treasurer to bid off in the name of the county all or any property at tax sales in case there are no other bidders. To consummate the act of 'bidding off' the treasurer must orally or in writing offer a bid on each parcel offered for sale in an amount no less than the total amount of delinquent taxes, penalty, interest and costs.
IN RE QUESTION NO. 2:
SDCL 10-23-25 requires the certificate be filled out in the name of the county. A blank certificate would not constitute the taking of or holding a certificate.
IN RE QUESTION NO. 3:
The certificate should be dated the date of the sale, but after the private sale, if any, 10-23-12. If for some reason certificates 'bid off' and the name of the county cannot be filled out the day of the sale; the date of the sale, or third Monday in December each year, should appear on the certificate, as that is the date the county gained interest in the property. They would thus be completed nunc pro tunc.
IN RE QUESTION NO. 4:
As in Question No. 1, it is not necessary to make a formal written bid, but an oral bid may occur and suffice. If no bid is made by an individual or announced by the treasurer, a sale did not occur and delinquent taxes for that year must be readvertised in subsequent years until sold or interest taken by action of 'bidding off' by the treasurer.
IN RE QUESTION NO. 5:
SDCL 10-23-25 requires a certificate be made out in the name of the county. Blank certificates would not constitute taking or holding of a certificate.
IN RE QUESTION NO. 6:
The county in this case would not be 'holding' a certificate.
IN RE QUESTION NO. 7:
See Question No. 6.
IN RE QUESTION NO. 8:
To sell or assign a certificate the county must first actually hold a certificate. If no bid was offered by the treasurer at the time of the original sale, such delinquent taxes must again be advertised and the property sold pursuant to 10-23-8 and 10-23-24.
IN RE QUESTION NO. 9:
To hold a certificate the county treasurer must first offer the property for sale, 10-23-8. In case there are no bidders to hold a certificate in the name of the county, the treasurer should make a formal bid orally or in writing and complete a certificate made out in the name of the county.
Respectfully submitted,
Mark V. Meierhenry
Attorney General
